Gold, silver see price declines ahead of FOMC minutes
(Kitco News) - Gold and silver prices are lower in early U.S. trading Wednesday, on routine corrective pullbacks from recent good price gains. A rebound in the U.S. dollar index at mid-week is also a negative for the precious metals. However, higher crude oil prices and falling U.S. Treasury yields today could very well prompt bullish traders to step in to buy the dip in prices. June gold futures were last down $11.80 at $1,853.50. July Comex silver futures were last down $0.293 at $21.77 an ounce.
U.S. trading may be more subdued early on today, ahead of the U.S. data point of the week: this afternoon’s release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC). The marketplace will be looking for further guidance on the timing and pace of the Fed’s monetary policy tightening cycle, and on inflation prospects. Trading could become more active in the immediate aftermath of the 2:00 p.m. EDT release of the FOMC minutes.
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
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The key outside markets today see Nymex crude oil futures prices higher and trading around $111.25 a barrel. Meantime, the U.S. dollar index is higher in early trading, on a corrective bounce from recent strong selling pressure. The yield on the 10-year U.S. Treasury note is fetching 2.729%. U.S. Treasury yields have been falling this week on a flight to quality move amid heightened concerns about the U.S. economy falling into recession.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, the weekly DOE liquid energy stocks report and the minutes from the last FOMC meeting.
Technically, the June gold futures bears have the overall near-term technical advantage but the bulls have gained momentum. A 2.5-month-old downtrend is still in place on the daily bar chart. However, more price gains this week would negate the uptrend. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $1,785.00. First resistance is seen at this week’s high of $1,869.10 and then at $1,875.00. First support is seen at this week’s low of $1,843.30 and then at $1,830.60. Wyckoff's Market Rating: 3.5
July silver futures bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. However, more price gains this week would negate the uptrend. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the May low of $20.42. First resistance is seen at this week’s high of $22.215 and then at $22.50. Next support is seen at this week’s low of $21.645 and then at $21.50. Wyckoff's Market Rating: 3.0.